Market Overview: FTSE 100 Futures
The FTSE futures market moved down strongly with a bear bar closing near its low on the weekly chart. It is a long-term FTSE 100 trendline break and could signal a larger move down in the medium term. Bulls have been buying here for over 12 months and making money so limit bulls will likely step in again. A reversal next week could setup a higher low major trend reversal back into the range. Bears want a break or breakout test for a measured move down. Even if they get another leg, it could setup a wedge bottom buy signal for the bulls which could be a great long-term swing trade.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures was a bear bar closing near its low so we might gap down on Monday.
- It is also the second consecutive bear bar closing near its low so we might get another leg down.
- For the bulls, they expected 2 legs sideways to down after a 5-bar tight bull micro channel. But it was a lower high with June so traders sold strongly high in the range where the math was good.
- The bulls also see a breakout test of the trading range below and a tight trading range for many months so it is a magnet.
- The bears see we are always in short again low in the trading range at support and breaking below the 100-week moving average.
- It has been over 50 weeks since the bears were able to get a gap bar below this moving average so it is a reasonable long-term buy signal.
- The bears want a break below here with a close below June and then March to signal the move. But we didn’t break below June so it might not be as bearish as it seems yet.
- The bulls want a reversal bar like in March – trading below Mon/Tue and then finishing the week on its high for a reasonable buy setup. However, after 22 strong bear bars, it might be better to wait for a second buy signal which has a higher probability.
- If you trade always in, better to be flat or short. Stop-entry bulls need a buy signal but limit-order bulls can buy below the bar betting 80% of breakouts fail. Targets below.
- Because it is a nearly 2-year trendline break we can expect to test the breakout point and maybe even the extreme or the lower high before making the move down.
- Luckily for the bulls, the bears’ stop is far away and they might not want to risk that much just yet. Even if they get a 3rd leg it could form a wedge bottom, low in a trading range which is a high-probability buy setup.
The Daily FTSE chart
- The FTSE 100 futures was a bear bar closing near its low on Friday so we might gap down on Monday.
- It is the 8th consecutive bear bar so it is a tight bear channel and most traders should not buy. It is the 5th consecutive bear bar without a bar going above its high, so the first reversal will likely be minor.
- The bulls see a sell climax and possible double bottom with July. They see a possible higher low, major trend reversal and will look to buy a High 1 or second-entry High 2 low in the trading range for a move back up. They know that 80% of breakouts fail.
- The bears see a tight bear channel and a breakout, so will look for a measured move at first from the lower high, which is around the March lows. But we will not necessarily go straight down.
- The bears want a follow-through bar but the risk is big so they might wait to sell above a pullback bar and a Low 1 signal or Low 2.
- The bulls know we are far below the moving average and might have moved too quickly so they can take a reasonable scalp back up to the moving average with a good buy signal. Most traders should wait for more information.
- Its a trading range for many months so no matter how bearish it looks at the bottom it could be a sell vacuum test of the lows and favors buying down here.
- Its a higher time frame trendline break so we might need to retrace briefly before continuing down for another leg.
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